The Impact Of The New Poultry Import Tariff

An increase in South Africa’s poultry tariff appears to have reduced imports, opening up opportunities for local producers to increase output. However, it has also contributed to an increase in the retail prices of poultry products. Thabile Nkunjana, an agricultural economist at the National Agricultural Marketing Council, explains.

- Thabile Nkunjana

South Africa’s poultry industry has dominated the news for some time, mainly on sensitive matters pertaining to trade policy. The industry was even mentioned in President Cyril Ramaphosa’s State of the Nation Address in February, when he said that through the implementation of the Poultry Master Plan, the industry had invested R800 million to upgrade production. As a result, South Africa had been able to produce an additional one million chickens every week.

POULTRY IMPORTS

The poultry industry is vital for food security, as it provides one of the more affordable sources of animal proteins to households. It is also important for job creation and is a crucial industry for rural upliftment, in particular for woman-headed households. As a result, trade policy, which is also dealt with in the Poultry Master Plan, is considered an important tool for providing the necessary support to domestic production.

While trade policy has the potential to boost local poultry production, it could also harm household consumption through price escalation caused by excessive protection. Policymakers are therefore faced with difficult decisions when balancing the interests of farmers and households to achieve a positive net welfare on the economy. It is imperative to ensure that import tariffs do not cause notable inflationary effects and thereby erode consumer welfare.